North East shops closing at alarming rate as retailers battle changing shopping habits

North East shops closed at an alarming rate of more than four stores every week as the challenging retail climate tightens its grip on the high street.

Retail store closures rose massively across the region’s high streets in the first six months of the year, with closures outstripping the number of stores opening amid changing consumer habits and economic uncertainty, according to research compiled by the Local Data Company (LDC) and PwC.

Shops are also closing seven times faster than they were in the same period last year, when 76 outlets opened and 87 closed leaving a net reduction of only 11 shops.

But in the first six months of this year, 42 shops opened and 114 closed across the North East, leaving a net loss of 72 shops.

And last year the region saw a net loss of 100 stores over 12 months – a significant increase on the net loss of 14 the year before.

The PwC/LDC analysis covers multiples retailers – businesses with more than five shops – in the top 500 town centres across Great Britain covering 66,961 outlets.

Northumberland Street, Newcastle (Image: Newcastle Chronicle)

Only Redcar saw a positive net change across all town centres in the North East in the first half of the year, with two shops opening and only one closing.

The North East towns with the highest net reduction were Newcastle, where 26 closed and only nine opened, Darlington, where 19 shut and six closed, Stockton, which only had one opening against 10 closures, and Whitley Bay, where eight closed and no stores opened.

Some retailers fared well amid torrid trading conditions, with beauty salons, watch, clock and jewellers’ repairs and pawnbrokers amongst the fastest growing in the first half of the year. The data also revealed that across multiple retailers in the 18 town centres analysed across the North East, estate agents, clothing repairs and alterations, letting agents, photographers and Travel agents experienced the largest net fall in the number of outlets.

“The North East’s high streets are no exception to this impact with many towns and cities experiencing significant net falls in the number of outlets, none more so than has been seen in Newcastle and Darlington.

“Whilst the recent measures announced in the chancellors budget may go some way to help some retailers, the fact remains the face of our high streets is changing as consumers shopping behaviours continue to change combined with heightened restructuring activity.”

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Across the UK, high street shops closed at a rate of around 14 a day in the first half of the year and openings were down a third.

The research showed retailers are battling the worst trading conditions for five years, with the growth of internet shopping and business rates blamed for the challenging climate.

The rise of “in-home leisure” – people preferring to spend free time and entertain at home rather than go out and about – is also suspected of taking a bite out of earnings.

Jamie’s Italian in Newcastle (Image: Newcastle Chronicle)

Italian restaurants including Jamie Oliver’s chain are said to have been particularly badly hit by the change, while retailers such as Toys R Us and Maplin have gone to the wall as more people shop online.

Ministers have been urged to take concerted action to help Britain’s beleaguered town centres, with experts warning the turmoil is “unlikely to abate”.

Tom Ironside, director of business and regulation at the British Retail Consortium, said: “The pressure on retailers, which is contributing to store closures, will continue unless the government takes decisive action.”

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He also called for the Government to address “spiralling business rates for the larger businesses that employ the majority of the UK’s 3.1m retail workers”.

Toys R Us, Maplin, Poundworld and Coast have been among the major fatalities on the high street so far in 2018, while House of Fraser was rescued from administration by Sports Direct founder Mike Ashley.

Company Voluntary Arrangements (CVAs) have been used with increased frequency as large and established chains struggle to adapt to the changing consumer landscape while being buffeted by headwinds including the increased costs from wages and rates.

Jamie’s Italian and Prezzo have announced CVAs, while Gourmet Burger Kitchen and Byron are also utilising the arrangements.